Networking device assembler Wistron NeWeb expects the shortage of MCUs, MOSFETs, power management ICs (PWM IC) and other chips demanding mature process manufacturing to persist and continue disrupting its output through the first quarter of 2023.

MCUs and other chips for use in networking devices require 40nm and above process manufacturing, and are still in tight supply, according to Haydn Hsieh, chairman for Wistron NeWeb.

Despite the shortage of these chips, Wistron NeWeb has yet to receive notifications from the chip suppliers about price hikes, Hsieh indicated. He expects the chip prices to stay flat in the third quarter.

Networking device companies all intend to keep inventory above their historical seasonal levels, Hsieh said. Wistron NeWeb held NT$15.11 billion (US$509 million) worth of inventory as of the end of the first quarter, up from NT$13.45 billion as of year-end 2021.

Customers are unlikely to massively overbook, as they may place only 10-20% more orders, Hsieh believes.

COVID lockdowns in several major Chinese cities have caused disruptions to the supply of components and raw materials for use in networking devices, as well as to logistics. Such disruptions have had a more severe impact than that of Wistron NeWeb's Kunshan plant closure, Hsieh indicated.

The US-China trade war has already encouraged Wistron NeWeb to expand its factory sites in Vietnam and Taiwan, Hsieh noted. Besides, when a new plant at its manufacturing site in Hanoi comes online, the company expects to see 20-25% to output generated from its Vietnam, according to Hsieh.

Wistron NeWeb is also looking to boost output at its manufacturing site in Taiwan to over 50% as a proportion of the company's total output, when additional production lines at its plant at the Southern Taiwan Science Park (STSP) arrive by 2023, Hsieh said.

By DIGITIMES